Bitcoin Should Be Regulated to Go Mainstream: Bank of America Official

He also mentioned that the other factors hindering Bitcoin’s rise are some cases of fraud, hacking and limited market acceptance:

"A key step for Bitcoin would be for it to become pledgeable collateral. However, large inherent risks to digital tokens such as fraud, hacking, theft, new protocol adoption, limited acceptance and that it is not legal tender many places in the world make it an unlikely development."

Traditional financial institutions stance on cryptocurrency

Blanch’s position is supported by other financial services industry players like Morgan Stanley. However, the efforts by several governments around the world to regulate the digital currencies have been relatively unsuccessful so far.

The possible reason behind this is that the cryptocurrencies are designed not to be regulated in conventionally.

As of the moment, government bodies such as SEC are determined to regulate the service providers using the cryptocurrencies like the exchanges and wallet services. They can also consider the currencies as a taxable currency, but this could not work either.

As an example, the Japanese government has just stopped the consumption tax imposed on Bitcoin. The users of Bitcoin, themselves, could expect that taxation guidelines will be introduced in the near future.

Banks vs. cryptocurrencies

It is understandable that several banks like Bank of America and Morgan Stanley are against the use of the digital currencies, as the use of cryptocurrencies may leave the banking industry obsolete if the number of people who use them will grow considerably shortly.